Int'l Aero Prods., LLC v. Aero Advanced Paint Tech., Inc.

325 F.Supp.3d 1078

INTERNATIONAL AERO PRODUCTS, LLC, Plaintiff,

v.AERO ADVANCED PAINT TECHNOLOGY, INC., Defendant.

Case No: 2:18-CV-03047-ODW(SK)

United States District Court, C.D. California.

Signed August 28, 2018

Kelly W. Cunningham, Cislo and Thomas LLP, Los Angeles, CA, for Plaintiff

Lisa Michelle Griffith, The Griffith Law Firm APC, Solana Beach, CA, for Defendant.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS AND TRANSFER FOR LACK OF PERSONAL JURISDICTION [16]

OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Pending before the Court is Defendant Aero Advanced Paint Technology, Inc.'s Motion to Dismiss, or in the alternative, Motion to Transfer for Lack of Personal Jurisdiction. (Mot. to Dismiss ("Mot."), ECF No. 16-1.) For the reasons below, the Court DENIES Defendant's Motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

This action arises from Plaintiff International Aero Products LLC's ("Plaintiff" or "IAP") allegations that Defendant Advanced Aero Paint Technology, Inc.'s ("Defendant" or "AAPT") infringed on Plaintiff's trademarks. (Compl. ¶ 1, ECF No. 1.) Specifically, the dispute concerns the right to use "AERO" and "AERO and Design" as trademarks. (See Opp'n 1, ECF No. 21.) In or around November 2016, while Plaintiff was advertising and promoting its products at the Specialty Equipment Market Association ("SEMA") in Las Vegas, Nevada, Defendant claimed that one of its customers was confused when he or she saw Plaintiff's products and exhibit and believed Plaintiff was related to Defendant. (Compl. Ex. 6, at 1.)

On April 11, 2018, Plaintiff IAP, a California limited liability company, commenced a lawsuit against Defendant AAPT. (Compl., ECF No. 1.) Plaintiff brought two causes of action: (1) infringement of a federally registered trademark under 15 U.S.C. § 1114 ; and (2) infringement of trademark under 15 U.S.C. § 1125(a).

On April 28, 2018, Defendant AAPT initiated a lawsuit in the Southern District of Ohio against IAP; International Aero Holdings, LLC; International Aero Engineering, LLC; International Aero Services, LLC; Jonathan M. Saltman; and DOES 1-5 (the "Ohio Action"). See Complaint with Jury Demand, Aero Advanced Paint Technology, Inc. v. International Aero Products, LLC et al. , No. 2:18-cv-00394-MHW-CMV (S.D. Ohio Apr. 28, 2018), ECF No. 1. Defendant's lawsuit asserts causes of action for: (1) Trademark Infringement in violation of 15 U.S.C. §§ 1111 and 1114 ; (2) False Designation of Origin and False Descriptions in violation of 15 U.S.C. § 1125 ; (3) Non-Infringement, Unenforceability, and Cancellation pursuant to 28 U.S.C. §§ 2201, 2202, and 15 U.S.C. §§ 1051, 1064, and 1125 ; and (4) Unfair Competition and Deceptive Trade Practices in violation of Ohio Revised Code section 4165. Id.

On May 3, 2018, before Defendant answered and within ninety (90) days after filing the Complaint, Plaintiff filed a First Amended Complaint ("FAC"). (FAC, ECF No. 11.) The FAC is essentially identical to the Complaint with one exception: instead of identifying Plaintiff IAP as a California limited liability company, Plaintiff amended the Complaint to assert that Plaintiff is actually a Delaware limited liability company with its principal place of business in California. (FAC ¶ 1.)

On June 8, 2018, in the Ohio Action, Plaintiff IAP (and the related entities and individual) filed a Motion to Dismiss and Transfer to transfer the case back to the Central District. See Motion to Dismiss, Stay, or Transfer, Aero Advanced Paint Technology, Inc. v. International Aero Products, LLC et al. , No. 2:18-cv-00394-MHW-CMV (S.D. Ohio June 18, 2018), ECF No. 27.

Subsequently, on June 28, 2018, Defendant AAPT filed its Motion to Dismiss or Transfer for Lack of Personal Jurisdiction in this action. (Mot., ECF No. 16.) This Motion is now before the Court for decision.¹

III. LEGAL STANDARD

A. Motion to Dismiss for Lack of Personal Jurisdiction

Pursuant to Federal Rule of Civil Procedure 12(b)(2), a party may seek dismissal of an action for lack of personal jurisdiction. Once a party seeks dismissal under Rule 12(b)(2), the plaintiff has the burden of demonstrating that the exercise of personal jurisdiction is proper. Menken v. Emm , 503 F.3d 1050, 1056 (9th Cir. 2007). Where the motion is based on written materials rather than an evidentiary hearing, "the plaintiff need only make a prima facie showing of jurisdictional facts." Sher v. Johnson , 911 F.2d 1357, 1361 (9th Cir. 1990). Accordingly, a court only "inquire[s] into whether [the plaintiff's] pleadings and affidavits make a prima facie showing of personal jurisdiction." Caruth v. Int'l Psychoanalytical Ass'n , 59 F.3d 126, 128 (9th Cir. 1995). Although the plaintiff cannot "simply rest on the bare allegation of its complaint," uncontroverted allegations in the complaint must be taken as true. Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc. , 551 F.2d 784, 787 (9th Cir. 1977) ; see AT&T Compagnie Bruxelles Lambert , 94 F.3d 586, 588 (9th Cir. 1996). Factual disputes are resolved in the plaintiff's favor. Pebble Beach Co. v. Caddy , 453 F.3d 1151, 1154 (9th Cir. 2006).

A federal district court may exercise personal jurisdiction over a non-resident defendant if the defendant has "at least ‘minimum contacts’ with the relevant forum such that the exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’ " Dole Food Co., Inc. v. Watts , 303 F.3d 1104, 1110–11 (9th Cir. 2002) (quoting Int'l Shoe Co. v. Washington , 326 U.S. 310, 326, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). A district court may exercise either general or specific personal jurisdiction over nonresident defendants. Fed. Deposit Ins. Corp. v. British-Am. Ins. Co. , 828 F.2d 1439, 1442 (9th Cir. 1987).

B. Motion to Dismiss/Transfer for Improper Venue

"For the convenience of parties and witnesses and in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. 1404(a).

Cases are also transferred based on the "first-to-file" rule. The first-to-file rule is a doctrine of federal comity; a district court may decline to exercise jurisdiction over an action when a complaint involving the same parties and issues has been filed in another district. Pacesetter Sys., Inc. v. Medtronic Inc. , 678 F.2d 93, 94–95 (9th Cir. 1982). This doctrine seeks to conserve limited judicial resources and avoid duplicate or inconsistent judgments on similar issues. Id. at 95.

In considering whether to apply this doctrine, a court must consider: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues. See Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss., Inc. , 787 F.3d 1237, 1240 (9th Cir. 2015). If a later-filed action meets the first-to-file requirements, the second court may transfer, stay, or dismiss the case. Alltrade, Inc. v. Uniweld Prods., Inc. , 946 F.2d 622, 623 (9th Cir. 1991).

IV. DISCUSSION

A. Specific Jurisdiction

1. Purposeful Direction

Plaintiff does not dispute that Defendant would not be subject to general jurisdiction in California; therefore, only specific jurisdiction is at issue here. (See Opp'n 7; Reply 3, ECF No. 22.) To determine specific jurisdiction in a suit involving trademark infringement,² a court looks to whether a defendant "purposefully directs" its activities toward the forum. Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 802 (9th Cir. 2004). Defendant contends that the mere presence and creation of its website is not considered purposeful availment to the forum. (Mot. 10; Reply 4.) Defendant's contention misses the point. The issue is not just over Defendant's website, but whether Plaintiff's allegations are sufficient to show that Defendant's activities, including the website, were purposefully directed toward the forum; specifically Defendant's alleged trademark infringement.

The Ninth Circuit has held that the relevant inquiry for purposeful direction is whether the defendant allegedly has (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state. Schwarzenegger , 374 F.3d at 803. Plaintiff's allegations meet this test.

a. Intentional Act

Under the first prong, Defendant must commit an intentional act. Plaintiff alleges that Defendant infringed on its trademark through the use of "Aero" and "Aero and Design" in connection with the marketing and sale of paint on automobiles without its permission. (FAC ¶¶ 27–29.) Plaintiff further alleged that Defendant's infringement was "knowing, willful, and deliberate." (Id. ¶ 31.) These allegations satisfy the "intentional act" prong. See Levi Strauss & Co. v. Toyo Enter. Co., Ltd. , 665 F.Supp.2d 1084, 1093 (N.D. Cal. 2009) (finding "intentional act" requirement satisfied by allegations of trademark infringement).

b. Expressly Aimed

Under the second prong, Plaintiff must demonstrate that Defendant expressly aimed its actions at the forum state. In this case, Plaintiff's allegations are substantially based on Defendant's website. The Ninth Circuit addressed this issue in Mavrix Photo Inc. v. Brand Techs., Inc. , 647 F.3d 1218 (9th Cir. 2011). The court found that the "maintenance of a passive website alone cannot satisfy the express aiming prong," but it has also found that "operating even a passive website in conjunction with ‘something more’ ... is sufficient." Id. at 1229 (9th Cir. 2011) (internal quotation marks and citations omitted). Thus, courts will look to the interactivity of the website, the geographic scope of the defendant's commercial ambitions, and whether the defendant targeted a plaintiff known to be a forum resident to determine whether a defendant has done "something more." Id.

The Ninth Circuit has also found that specific jurisdiction exists when "a plaintiff files suit in its home state against an out-of-state defendant and alleges that defendant intentionally...